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Lumber, plywood prices skyrocket
New York Times via Houston Chronicle ^ | May 1, 2004 | BERNARD SIMON

Posted on 05/05/2004 4:30:23 PM PDT by snopercod

TORONTO — Lumber and plywood prices have shot up so rapidly in recent months that they are tearing the profit out of home construction for some builders and threatening to dent the booming housing market.

Paul Kuszmaul, president of Kuszmaul Builders in Champion, Ohio, said the run-up in prices had left him unsure whether to push ahead with a condominium development in the Mahoning Valley, between Pittsburgh and Cleveland.

Since January, he said, the cost to build each condo unit in the project had risen $4,000, largely because the price has more than doubled for oriented-strand board, a widely used substitute for plywood made by pressing long wood strips together using adhesives.

The product has been rapidly displacing plywood as a construction material because it is cheaper to make, can be made from the limbs and roots of trees as well as trunks, and is more uniform in quality. Almost three-fifths of all structural wood panels now sold are oriented-strand board, or OSB, compared with a quarter in the early 1990s.

Prices of both OSB and plywood reached records one week last month. According to Random Lengths, a trade publication, 1,000 square feet of -inch OSB sells for $503 in the north-central United States; this time last year, the same amount cost $170. Half-inch four-ply southern pine plywood is up to $523 for 1,000 square feet, from $240 a year ago.

Plywood prices began to rise last year in late May and early June, dropping late in the year, before increasing sharply in January.

Prices of other types of lumber have also risen, although less sharply. And the buoyant metals markets, especially for steel, have also driven up costs.

"It's almost a rocket ship ride," said Jim Enright, general sales manager at Rosboro Lumber, a plywood manufacturer in Springfield, Ore. "The activity level since the beginning of the year has been phenomenal."

The ride has been less exhilarating for buyers. Brian Catalde, president of Paragon Communities, a builder in Playa del Rey, Calif., said that the cost of the lumber used in building a typical entry-level home had roughly doubled in 18 months, to $24,000.

A handful of manufacturers dominate the OSB market. Five companies account for three-quarters of all sales in North America. They are Louisiana Pacific, Weyerhaeuser and Georgia-Pacific in the United States, and Nexfor and Grant Forest Products in Canada.

One reason for the price surge is that production of the boards has not grown fast enough to make up for the loss of plywood, because of the closing of older plants.


TOPICS: Business/Economy; Extended News
KEYWORDS: construction; inflation; lumber; tariffs; treehuggers
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To: antaresequity
Our local home depot had 1/2" CDX for $32.90 per sheet yesterday. But that still puts me in shock!
21 posted on 05/05/2004 4:46:26 PM PDT by JoeSixPack1 (Our American prison guard's in Bahgdad need extended time off in Leavenworth, Ks.)
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To: DB
Good luck, the stock of plywood and OS board in NJ is non-existent, large builders are bringing it in from other states, and NJ based builders are going to lengths, like travelling 2 to 3 states away to buy supplies. NJ is still in a new construction boom, prices are skyrocketing on new homes built with sub-standard lumber (and sub-par construction workers), these homes won't stand for more than 20 years.
22 posted on 05/05/2004 4:47:26 PM PDT by JerseyHighlander
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To: snopercod
I am glad I will be building with concrete. By the time wood finishes going up in price, concrete will be cheaper.
23 posted on 05/05/2004 4:47:27 PM PDT by Veloxherc (To go up pull back, to go down pull back all the way.)
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To: snopercod
"'The guy at the lumber store said, "All the plywood is being sent to China and Iraq""'

I dont think the world is even remotely prepared for the impact China is going to have on the global economy. It will be the greatest upheaval in 60 years
24 posted on 05/05/2004 4:47:27 PM PDT by boxsmith13
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To: snopercod
According to Random Lengths, a trade publication, 1,000 square feet of -inch OSB sells for $503 in the north-central United States; this time last year, the same amount cost $170. Half-inch four-ply southern pine plywood is up to $523 for 1,000 square feet, from $240 a year ago.

Yes, but a year ago, the plywood business was in a slump---prices were way down and wood processing plants were shut down---putting a lot of people out of work.

What was the price of plywood in 2000 or 2001?

I know this is hard for the media to understand, but in a market economy, prices go up and down based on demand. I'm sure John Kerry feels that if he is elected, he will be able to order prices very low with no impact on production---after all, his favorite era was the Nixon administration.

25 posted on 05/05/2004 4:47:28 PM PDT by John Thornton
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To: snopercod
Use CMU instead.
26 posted on 05/05/2004 4:49:12 PM PDT by Rome2000 (Foreign leaders for Kerry!!!!!)
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To: snopercod
Ther are litterally MILLIONS of good prime lumber pine trees standing dead right now in the forests of Southern California.Victims of drought, inviting bark beetle infestations due to overgrowth, too many trees per acre competing for moisture. But offers for their sale and removal will not be touched by lumber companies due to all the environmental restrictions placed within the contracts. The BLM even offered a lumber mill free for the taking but no takers.
Right now in the San Bernardino National Forest , property owners are paying a premium price to have contractors remove the dead trees, racing to get ahead of the next fire season ,and they go to waste,or firewood mostly
It is a tragedy, By next year Sequoia National forest will have millions of Brown dead standing pine , the death rate is already showing around 20% there 80% dead forest in San bernardino NF
Good thing Clinton declared all that new National Monument status locking out the public access to all that beautiful forest and killing any chance of harvesting or thinning.
A great national treasure squandered by the Leftist entity, The Sierra Club
27 posted on 05/05/2004 4:50:20 PM PDT by Freesofar (vicariously micromanaging reality from the safety of my keyboard,)
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To: DB
We've been working and saving for 11 years to build on our property and now the prices are souring out of control. I don't know what's going to happen. I expect many sleepless nights...

Having built two houses on my own - one in Los Osos, one in NC - I know what is going to happen.

You are going to run out of money before it is finished unless you take action now. You probably will anyway. I always did ;-)

There are many things you can do to cut costs. Better start looking...

28 posted on 05/05/2004 4:50:50 PM PDT by snopercod (I used to be disgusted. Then I became amused. Now I'm disgusted again.)
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To: JerseyHighlander
I'm in central California. Probably just as bad here...
29 posted on 05/05/2004 4:51:00 PM PDT by DB (©)
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To: antaresequity
OK, I stand corrected, NJ prices haven't hit that level yet, but try getting one order for a house, won't happen, home improvement contractors are running around buying here and there for additions, houses have board stamped from 2 or 3 manufacturers.
30 posted on 05/05/2004 4:51:06 PM PDT by JerseyHighlander
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To: BossLady
All this inflation could be enough to trigger a new recession...that's what I fear.

It probably won't happen before November, however, so if Bush can keep a 1-vote lead in Florida and Ohio...
31 posted on 05/05/2004 4:51:08 PM PDT by dufekin (Eliminate genocidal terrorist military dictator Kim Jong Il ASAP)
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To: antaresequity; snopercod
1/2 8' OSB 1689.60 per unit / 51.80 sheet / 1.60 sq ft

1/2 8' CDX 1584.00 per unit / 48.00 sheet / 1.50 sq ft

I ain't paying that for birch and oak plywood.

3/4" shop grade birch is running around $30.00 per sheet.

3/4" oak is running $44.00 per sheet.

32 posted on 05/05/2004 4:51:17 PM PDT by Vigilantcitizen (Donít go around stating the world owes you a living; the world owes you nothing; it was here first.)
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To: JoeSixPack1
whoops

I made a mistake [actually the guy quoted it wrong]

I called back...Golden State is quoting 20.94 and 21.20 a sheet [CDX/OSB]
33 posted on 05/05/2004 4:51:28 PM PDT by antaresequity
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To: snopercod
We're working on rebuilding the fence around our yard (6'x 8" rough cut redwood). My husband has decided to redesign the portion in the backyard that borders on open space, after checking out the price of lumber. We're using wire, reusing the posts, since they're still most in pretty good shape (the infill, however, and the rails were pretty shot), and replacing the top and bottom rails and the kickboards. He just bought the rails over the weekend, and paid over $200 for rough cut redwood, 2X4's, I think. I'm glad he agreed to do the wire thing. I had proposed this before, and he didn't like the idea. But, it'll save us a whole lotta money to do it this way. It doesn't look bad, and several of our neighbors have done it this way.
34 posted on 05/05/2004 4:51:31 PM PDT by .38sw
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To: snopercod
He thinks those prices are high, he should price redwood. A 16' 2x6 is $20. And that is common construction not heart. Heart is $10 more.
35 posted on 05/05/2004 4:53:14 PM PDT by farmfriend ( In Essentials, Unity...In Non-Essentials, Liberty...In All Things, Charity.)
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To: snopercod
I guess I now have a good excuse for not starting that huge deck my wife has been nagging me about.

"Not now, dear, we have to wait for the lumber prices to fall back down."
36 posted on 05/05/2004 4:53:14 PM PDT by Skooz (My Biography: Psalm 40:1-3)
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To: Vigilantcitizen
my mistake...I divided by 33 sheets a unit not 66...and the first quote was not my regular guy...it was the counter guy.

I got throug to my broker and he quoted both at around 21 a sheet.

Sorry for the confusion
37 posted on 05/05/2004 4:53:27 PM PDT by antaresequity
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To: snopercod
That was encouraging...

I think I'll just go and cry now...
38 posted on 05/05/2004 4:53:57 PM PDT by DB (©)
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To: antaresequity
Sweet Mother of God! $48 for 1/2 CDX?
39 posted on 05/05/2004 4:54:54 PM PDT by Petronski (Hubris knows no editor.)
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To: BossLady
Are you in the construction biz?

Kindasorta. I was licensed in CA way back when, but couldn't tolerate the excessive regulation and left the miserable state. I have built two homes on my own (with the help of my lovely wife).

Now I design houses out of my house since I can't find a "real job" here in NC.

I was thinking of building a small vacation rental here in the mountains where I live. I have an offer in on a lot a few hundred feet from a big waterfall. Now I am wondering if this is going to work...

40 posted on 05/05/2004 4:55:49 PM PDT by snopercod (I used to be disgusted. Then I became amused. Now I'm disgusted again.)
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